Kerala High Court: Co-operative Societies Come Under Ambit of RTI Act

Thalapalam Service Co-Operative Bank vs Union Of India

on 3 April, 2009

Kerala High Court

IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C).No. 18175 of 2006(L)

1. THALAPALAM SERVICE CO-OPERATIVE BANK

... Petitioner

Vs

1. UNION OF INDIA,

... Respondent

2. STATE OF KERALA,

3. THE REGISTRAR OF CO-OPERATIVE SOCIETIES,

4. STATE INFORMATION COMMISSIONER,

5. ASSISTANT REGISTRAR OF CO-OPERATIVE

6. K.T.THOMAS,

For Petitioner :SRI.P.V.BABY

For Respondent :SRI.MOHAMMED SHAH, ADDL.CGSC

The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN

Dated :03/04/2009

O R D E R

THOTTATHIL B.RADHAKRISHNAN, J.

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W.P(C).Nos.18175, 20154 & 33318 OF 2006,

17156, 19384, 20308, 23571, 25941, 24513, 32332, 34229, 34798, 35106,

35244, 35285, 36219, 36372, 36800 & 36891 OF 2007, 3324, 3351, 4660, 4793, 5234, 6471, 7584, 12803, 14280, 14936, 15403, 16412, 19729, 19923, 20572 & 22855 OF 2008

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Dated this the 3rd day of April, 2009

JUDGMENT

"C.R."

1. These writ petitions raise the question of applicability of the Right to Information Act, 2005, hereinafter, the 'RTI Act', to co-operative societies registered under the Kerala Cooperative Societies Act, 1969, for short, the 'KCS Act'.

2. The Registrar of Co-operative Societies issued circular No.23/06, taking the view that all co-operative societies registered under the KCS Act, hereinafter, for short, the 'societies', are under the administrative control of the Registrar and therefore, public authorities for the purpose of the RTI Act. Directions were hence issued, requiring all societies to discharge the obligations as public authorities under the RTI Act and to follow the procedure stated therein. The Information Officers in the Co-operative Department of

the State Government commenced acting on complaints of non-consideration of requests for information made by different persons to societies. These writ petitions are hence filed, seeking to quash the aforesaid circular and for a declaration that the RTI Act does not apply to societies registered under the KCS Act. Certain actions taken by the officers under the KCS Act and orders issued by the State Information Commission touching the issue, in individual cases, are also under challenge.

3. In its gist, the contention advanced by the petitioners is that the societies are not public authorities as defined in Section 2 (h) of the RTI Act, but are establishments over which, the

statutory provisions under the KCS Act and Kerala Cooperative Societies Rules 1969, for short, the 'KCS Rules', framed under that Act, apply, providing access to information by recourse to those procedures. On behalf of the petitioners, it is argued that societies are not established or constituted by or under the Constitution; by any other law made by

Parliament; by any other law made by the State Legislature or by notification issued or order made by the appropriate Government and that they are not bodies owned, controlled or substantially financed by funds provided by the appropriate Government and hence, do not fall within the definition of "public authority" under Section 2 (h) of the RTI Act. The obligation to act in terms of Section 4 (1) of the RTI Act is confined only to "public authorities" as defined in that Act and therefore, the Registrar of Co-operative Societies had acted contrary to the statutory provisions and without authority, in issuing the impugned circular, it is contended.

4.Per contra, on behalf of the State of Kerala, the Registrar of Co-operative Societies, the State Information Commission and the contesting private respondents, it is argued that the

applicability of RTI Act to societies cannot be excluded in terms of the clear provisions contained in the RTI Act and that the provisions available in the KCS Act and Rules thereunder is no answer to exclude the applicability of the RTI Act. It is further argued that there is no ambiguity in the RTI Act and the same has to be interpreted to give effect to that Act. It is further argued that at any rate, having regard to the definition of 'information' in Section 2 (f) of the RTI Act, the access to information in relation to societies cannot be denied. Is the right to information in relation to cooperative societies available under the RTI Act?

5. Section 3 of the RTI Act states that subject to the provisions of that Act, all citizens shall have the right to information. Section 2 (f) of the RTI Act which defines 'information' reads

as follows: "Information" means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks,contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force.

6.Going by the afore-quoted, information relating to any private body, which can be accessed by a public authority under any other law for the time being in force is information. The definition of the word 'information' as provided in Section 2 (f) has also to be applied to the word 'information' occurring in that clause itself. Therefore, information relating to any private body which can be accessed by a public authority includes all materials in any form which are enumerated before the use of the conjunction 'and' before the word 'information' occurring in Section 2 (f), in relation to private bodies.

7.It is the contention of the petitioners themselves that the provisions of the KCS Act and Rules empower access to information, following those rules. This is so, pithily because the statutory powers under the KCS Act and KCS Rules are available to the Registrar of Co-operative Societies, appointed by the Government under Section 3 (1) of the KCS Act and to all other officers on whom the powers of the Registrar are conferred by the Government in exercise of statutory authority under section 3 (2) of that Act and to different officers in the hierarchy of the executive establishment on whom powers are conferred or delegated by or under the KCS Act and KCS Rules. Those authorities are, beyond doubt, public authorities for the purpose of the RTI Act, they being personnel of the government service

establishment, which is established and constituted by or under the Constitution and the laws made by the State Legislature, including the Kerala Public Services Act, 1968. Over and above that, different provisions in the KCS Act and Rules provide for audit, enquiry, supervision, inspection, surcharge proceedings, power to compel production of documents etc. These provisions indisputably and unequivocally empower the different officers of the Cooperative Department in the Government to access information as defined in Section 2 (f) of the RTI Act in so far as they relate to any co-operative society.

8.Unlike in the Freedom of Information Act, 2002, hereinafter referred to as the `FOI Act' (which stands repealed as per Section 31 of the RTI Act), in the RTI Act, "information" means materials in any form, including the different types and modes noticed in the definition of that term in Section 2(f) and information relating to any private body which can be accessed by a public authority under any other law for the time being in force. For the purpose of the FOI Act, going by Section 2(b) thereof, "information" meant any material in any form relating to the administration, operations or decisions of a public authority. This change in the amplitude of the statute law relating to the field of freedom, right and access to information is noticed to conclude forthwith that even if societies are to be treated only as private bodies, in view of the availability of different provisions under various other laws in force, including the KCS Act and the KCS Rules providing access to information relating to any society by public authorities, such accessible information would fall within the term "information" for the purpose of the RTI Act.

9.Therefore, even if a co-operative society is a private body, any person who desires to obtain any information in relation to a society, is entitled to move the competent public authority and such information in relation to a society would then be accessible through that public authority, unless the access to such information is forbidden by the RTI Act. Access to information is therefore available to citizens in relation to all co-operative societies, in terms of the RTI Act. Are the co-operative societies "public authorities" for the purpose of the RTI Act, to be compelled to perform the statutory duties imposed through the provisions of the RTI Act, occurring in Chapter II of that Act, particularly Sections 4 to 11 thereof?

10. Since it was pointed out that Section 2(h) of RTI Act, which defines "public authorities", has been erroneously quoted in certain publications, that provision, as available in the Gazette of India is extracted hereunder: "public authority" means any authority or body or

institution of self-government established or constituted-

(a) by or under the Constitution;

(b) by any other law made by Parliament;

(c) by any other law made by State Legislature;

(d) by notification issued or order made by the appropriate Government, and includes any-

(i) body owned, controlled or substantially financed;

(ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriate Government;

11. The incidence of registration of a society under the KCS Act is that such registration shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purpose for which it was constituted. This provision in Section 9 of the KCS Act read with the provisions in Chapter X of that Act would show that societies are not institutions or

establishments constituted under that Act. Sections 71 to 73 provide for winding up of a society and the modalities therefor. The effect of cancellation of registration under Section 74 is that the status as a corporate body is lost. The final authority of a society vests in the General Body of its members in terms of Section 27 and the General Body constitutes a committee to be entrusted with the management of the affairs of the society in terms of Section 28 of the KCS Act. These provisions, put generally, would show that societies are not established or constituted by or under the KCS Act or Rules. Therefore, they do not fall under sub clauses (a) to (d) of clause (h) of Section 2 of the RTI Act.

12.The question that then arises would be as to whether societies would fall under those governed by the expansive limb of Section 2 (h) of the RTI Act, whereby, public authority

includes any of those which fall under sub clause (i) and (ii) in the inclusive components of Section 2 (h).

13.Here, the argument on behalf of the petitioners is that the said portion of Section 2 (h) is wrongly worded and as it now stands, admits of multifarious interpretations. It is argued

that the words "directly or indirectly by funds provided by the appropriate Government" in the last limb of Section 2 (h) are essentially vague. It is pointed out that if those words are

placed following sub clause (i), it would amount to reading that the definition of public authority envisages even control of bodies by funds provided by the appropriate Government. It is argued that this is plainly illogical. Next, it is argued that if the afore-quoted words really refer only to financing, the word 'substantially' has no fixed meaning and in the absence of any yardstick being prescribed in the RTI Act, as regards the extent of financing envisaged by the legislature to rope an institution into that Act, there is every likelihood of abuse of power by the authorities under that statute by misuse of the

provisions thereof.

14.Responding, on behalf of the Government and, in particular, the State Information Commission, it was pithily argued that having regard to the provisions commencing from Section 3 of the RTI Act and the rights and obligations created thereby, even if the question calls for a contextual construction, that needs to be done using the legislative prescription that the definition clause in Section 2 of that Act applies only unless the context otherwise requires. It is contended that having regard to the purpose of the RTI Act and the goal sought to be achieved by the said piece of legislation, any deficiency which may be pointed out on a strict but apparently plain reading of the provisions of Section 2 (h) in the definition clause by applying the punctuations, as used in the statute, has necessarily to give way to a purposive construction; if required, by judicially punctuating the contents of Section 2 (h).

15. The appropriate Government, going by Section 2 (a) of the RTI Act, is the Central Government or the State Government, where that term is used in relation to a public authority, which is established, constituted, controlled or substantially financed by funds provided directly or indirectly by the Central Government/Union territory administration or by the State Government, as the case may be.

16.In People's Union for Civil Liberties v. Union of India [(2003) 4 SCC 399], it was noticed that in the Constitution of our democratic Republic, among the fundamental freedoms,

freedom of speech and expression shines radiantly in the firmament of Part III. This cherished freedom has grown from strength to strength in the post-independence era and has been constantly nourished and shaped to new dimensions in tune with the

contemporary needs by the constitutional courts. Pointing out that State of U.P. v. Raj Narain [(1975)4 SCC 428] is, perhaps, the first decision which has adverted to the "right to information", Mathew J was quoted - "The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary, when secrecy is claimed for transactions which can, at any rate, have no repercussion on public security" and that "in a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a pubic way, by their pubic functionaries." In S.P.Gupta v. Union of India [(1981) Suppl.SCC 87], the Apex Court noted that "the concept of an open government is the direct emanation from the right to know which seems to be implicit in the right of free speech and expression guaranteed under Article 19(1)(a)" and "therefore, disclosure of information in regard to the functioning of Government must be the rule and secrecy an exception........". It was emphasised that no democratic government can survive without accountability and the basic postulate of accountability is that the people should have information about the functioning of the Government. After referring to Raj Narain and S.P.Gupta (supra), the Apex Court made further reference in PUCL (supra) to Dinesh Trivedi v. Union of India [(1997)4 SCC 306] noticing that in modern constitutional democracies, it is axiomatic that citizens have a right to know about the affairs of the Government which, having been elected by them, seeks to formulate sound policies of governance aimed at their welfare and that like all other rights, even this right has recognised limitations and is, by no means, absolute.

17.We, the People of India have constituted ourselves into a democratic Republic; that Nation and her People, being governed by the Constitution of India. Democracy requires an

informed citizenry and transparency of information that are vital to its functioning. Availability of information is necessary to contain corruption. The instrumentalities which meddle with public funds or with the interest of the citizens are to be made accountable. In actual practice, revelation of information is likely to conflict with other public interests,

including efficient operations of the Governments, optimum use of limited fiscal resources and the preservation of confidentiality of sensitive information. It is necessary to harmonise these conflicting interests while preserving the paramount status of the democratic ideal. The RTI Act is enacted in this constitutional backdrop. The object sought to be achieved by that enactment is to provide for setting out the practical regime of right to information for citizens to secure access to information. The purpose of that is to promote transparency and accountability in the working of every public authority. The RTI Act is a mode to access information. What may come out ultimately could be the assurance that all is well; or should be shocking revelations which may call for appropriate action. This again, would be a matter of concern for the citizenry.

18.As already noticed, the right to information and, therefore, the right of access to information are species of fundamental rights referable to the freedom of speech, enumerated in the Constitution as a fundamental right. This conceptualization is part of the law laid by the Apex Court in the precedents noted above. They are therefore part of the law of the land as emanating from the Constitution, that too, from Part III itself. Effectuation of the fundamental rights does not require any legislation. It inheres unitarily in every citizen and collectively in the citizenry, as a lot. Legislation can be to effect restrictions on the enjoyment of the fundamental rights; to the extent restrictions are permissible within the constitutional parameters. Or, legislations could provide for the free and orderly flow of the modality for the enjoyment of those rights. While the former is a restrictive covenant on the enjoyment and could affect only those who are entitled to enjoy, the latter class of legislative provisions are intended to provide the procedure to reach at the guaranteed fundamental rights, hassle-free.

19. Analysing the RTI Act with the aforesaid in mind, it can be seen that the provision in section 3 thereof that subject to the provisions of that Act, all citizens shall have the right to information, is the legislative recognition of the constitutional right of every citizen to information, including the right to access information. The provisions in the RTI Act, subject to which the citizen could enjoy the right to information, are laws amounting to restrictions made by the Parliament on the right to information and the right to access information, and therefore, restrictions on the freedom of speech. The legitimacy of any such restriction has to answer the constitutional touchstones. The authority to make such restriction is provided for and controlled by Article 19(2) of the Constitution. The said provision enumerates the grounds on which a restriction could be imposed by law on the citizens' fundamental right to freedom of speech and expression. The authorization to make law imposing reasonable restrictions on that fundamental right is confined to be only in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with Foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence. Unlike in clause (6) of that Article which carves out the limits of legislative permissiveness to impose restrictions on the fundamental right to the freedom to practice any profession or to carry on any occupation, trade or business, clause (2) of Article 19 does not provide the interest of the general public as a ground on which the right to freedom of speech and expression could be curtailed. This distinction is well established. See Sakal Papers (P) Ltd. V. Union of India [AIR 1962 SC 305]. Unless justified under clause (2) of Article 19, any restriction on the fundamental right guaranteed by Article 19(1) (a) would be plainly violative of the freedom of speech and expression, a valuable and cherished fundamental right. The parliamentary presentment through the RTI Act is not a statutory conferment of a right that could be passed off as merely a statutory right. For, legislation cannot whittle down a fundamental right guaranteed under the Constitution.

20.Apart from the restrictions imposed by its provisions on the right to information inclusive of the right to access information, which restrictions operate against the conferee of that fundamental right, namely, the citizen, the RTI Act is, as its preamble declares, enacted to provide the practical regime of right to information for citizens to secure access to information.

21. The aforesaid and the legislative declaration contained in Section 3 of the RTI Act that all citizens shall have the right to information, have to be borne in mind while interpreting the provision "substantially financed by funds provided directly or indirectly" in Section 2(a) and the provision "substantially financed, directly or indirectly by funds provided by the appropriate Government" as contained in Section 2 (h), of the RTI Act. "Provide" means to make ready before hand; to supply; to procure supplies, means or what may be desirable; make provision. When one proceeds to provide, the intention is not necessarily that he provides from himself or from his own bag exclusively. If you provide something that someone needs or wants, or if you provide them with it, you give it to them or make it available to them. If you provide for someone, you support them financially and make sure that they have the things that they need. If you provide for something that might happen or might need to be done, you make arrangements to deal with it. The provisions under

interpretation relate to those which are substantially financed by funds which are made available to them by the Government. It is sufficient that the funds reach a society as a


result of the actions taken by the Government, thereby making available, the necessary finance that is required for the society for its activities. The essence of the act of providing is the making available of what is required to be provided. In this view of the matter, "funds provided by the appropriate Government" is not necessarily providing funds from what belong to the appropriate Government, either exclusively or otherwise, but also those provisions which come through the machinery of the appropriate Government, including by allocation or provision of funds with either the concurrence or clearance of the appropriate Government. This view emanates on a plain reading of the provision under consideration, having regard to the object sought to be achieved by the RTI Act and in this view, the said provision has to be read to take within its sweep all funds provided by the appropriate Government, either from its own bag or funds which reach the societies through the appropriate Government or with its concurrence or clearance. Not only do I find no ground to exclude this interpretation, but see much support for it. If the legislative intention were not so, it was unnecessary to state in the RTI Act ". . . . . . .

substantially financed . . . . . . . by funds provided by . . . . . .". It would have been sufficient to state ". . . . . substantially financed by. . . . . . .". The use of the words "by funds provided

by" enlarges and dilates the scope of the words "substantially financed" in that provision. It has to be remembered that it would never be assumed that the legislature uses language

superfluously. The courts will not treat any legislative usage as surplusage, but will look at the very use of the language by the legislature, as intentional of conveying the true and

complete meaning of what the legislature intended to say. As stated by the Apex Court in Babaji Kondaji Garad v. Basik Merchants Coop. Bank Ltd. [(1984) 2 SCC 50], the Legislature uses appropriate language to manifest its intentions. Arming of citizenry with information is not a matter that should be trimmed, crippled, clipped or excluded. It ought to be permitted to be available wherever it could, except where it is impermissible. This is why even in the Act, which transformed the concept of freedom of information to be that of a right to information, clear and specific exceptions and exclusions are legislatively provided and they are the only prohibited zones insulated from access under the RTI Act. This object of the RTI Act has to be achieved and the interpretation adopted above is purposive, to give effect to the legislative intention of that statute.

22.Now, the question for immediate consideration is as to whether the inclusive component of the clause in Section 2 which defines public authority is vague and incapable of application and if so, whether this Court has to read it with appropriate punctuations to give effect to the intention of the legislature.

23.As regards grammar and punctuations, I deem it fit to quote Y.V.Chandrachud, C.J. - State of West Bengal v. Swapan Kumar Guha [(1982) 1 SCC 561]. A question arose regarding the statutory meaning of the expression Money Circulation Scheme defined in Section 2(c) of the statute that fell for consideration in that precedent. Paragraph 5 of that

judgment reads as follows:

"Grammar and punctuation are hapless victims of the pace of life and I prefer in this case not to go merely by the commas used in clause (c) because, though they seem to me to have been placed both as a matter of convenience and of meaningfulness, yet, a more thoughtful use of commas and other gadgets of punctuation would have helped make the

meaning of the clause clear beyond controversy. Besides, how far a clause which follows upon a comma governs every clause that precedes the comma is a matter not free from doubt. I therefore consider it more safe and satisfactory to discover the true meaning of clause (c) by having regard to the substance of the matter as it emerges from the object and purpose of the Act, the context in which the expression is used and the consequences

necessarily following upon the acceptance of any particular interpretation of the provision, the contravention of which is visited by penal consequences."

24.The primary intention of semicolon is to indicate a discontinuity of grammatical construction greater than that indicated by a comma but less than that indicated by a full

stop. "The semicolon separates two or more clauses which are of more or less equal importance and are linked as a pair or series: Economy is no disgrace;m for it is better to live on a little than to outlive a great deal. The temperate man's pleasures are always durable, because they are regular, and all his life is calm and serene, because it is innocent. To err is human; to forgive, divine. Never speak little of what you know; and whether you speak or say not a word, do it with judgement". See Hart's Rules as slightly abridged and provided in Fowler's Modern English Usage, revised third edition by R.W.Burchfield.

25.Semi colon provided at the end of the word "financed" in clause (i) in the inclusive limb of Section 2 (h) of the RTI Act is so placed only because of the coma used in that clause, after the word "owned". A semi colon is not used at the end of clause (ii) because no coma is used anywhere in that limb. The meaning sought to be conveyed by the legislative provision in hand is quite clear. The term "fund" relates primarily to money. That, in turn, is relatable only to financing. In any concept of the matter, be it common parlance or technically administrative, the words "directly and indirectly by funds provided by the appropriate Government" relate only to the term "substantially financed" occurring in clauses (i) and (ii) of the expansive limb of the definition of public authority. As far as the words "body owned" and "controlled" occurring in the first limb are concerned, that usage is also beyond any shade of doubt. That what is conceived and provided for by the legislation is that such owning or control is by the appropriate Government. If any person who is exceptionally well versed in the punctuation of English language needs, I may attempt to add a semi colon after the word "provided" in the last lap of the definition clause. There is really no ambiguity in the matter and this judicial declaration as to the interpretation and construction of the definition of public authority as defined in clauses 2 (h) is only clarificatory of the position which is otherwise explicit, viz., that any body owned or controlled by the appropriate Government and any body substantially financed by funds provided by the appropriate government as also any non-government organisation substantially financed by funds provided by the appropriate Government would fall within the inclusive limb of the definition of public authority in Section 2(h) of the RTI Act.

26. Societies are not government organisations. Section 2 (h) (ii) of the RTI Act uses the term "Non-Government organisations", one not defined in the Act. Section 2 (h)(ii), therefore, refers to something that is not part of the Government; which is very true of a society, as pointed out even by the petitioners. If a society is substantially financed,

directly or indirectly by funds provided by appropriate Government, it falls within the inclusive definition of 'public authority'; within the expanse of that definition clause.

Therefore, any co-operative society registered under the KCS Act is a non-government organisation and if it is substantially financed, directly or indirectly by funds provided by

appropriate Government, it is a public authority for the purpose of Section 2 (h) of the RTI Act.

27. The word "substantial" has no fixed meaning. For the purpose of a legislation, it ought to be understood definitely by construing its context. Unless such definiteness is provided, it may be susceptible to criticism even on the basis of Article 14 of the Constitution. See Shree Meenakshi Mills Ltd. v. A.V.Viswanatha Sastri (AIR 1955 SC 13 at page 18). The word substantial means - of or having substance: being a substance: essential: in essentials: actually existing: real: corporeal, material: solid and ample: massy and stable: solidly based: durable: enduring: firm, stout, strong: considerable in amount: well-to-do: of sound worth. See the Chambers 20th Century Dictionary. In fact, the concept "substantial" has been understood in different shades and applied contextually. In relation to Section 100 of the Code of Civil Procedure, it was held that a substantial question of law means a question of law having substance, essential, real, important. It was understood as something in contradistinction to - technical, of no substance or consequence, or merely academic. See Santhosh Hazari v. Purushottam Tiwari [(2001) 3 SCC 179]. "Substantial interest" in the context of the Income Tax Act was found to require a contextual construction, having regard to the succeeding expressions which enumerated what substantial interest really meant. See R.Dalmia v. C.I.T. [(1977) 2 SCC 467]. "Substantial portion of such goods", an expression occurring in the Customs Act, was understood to mean substantial portion of the goods, that have been imported keeping in view the quantity as well as the value of the goods that have been imported. See India Steemship Co. Ltd. v. Union of India [(1998) 4 SCC 293]. Such a spectrum of substantial wisdom essentially advises that the provision under consideration has to be looked into from the angle of the purpose of the legislation in hand and the objects sought to be achieved thereby, that is, with a purposive approach. What is intended is the protection of the larger public interests as also private interests. The fundamental purpose is to provide transparency, to contain corruption and to prompt accountability. Taken in that context, funds which the Government deal with, are public funds. They essentially belong to the Sovereign, "We, the People". The collective national interest of the citizenry is always against pilferage of national wealth. This includes the need to ensure complete protection of public funds. In this view of the matter, wherever funds, including all types of public funding, are provided, the word "substantial" has to be understood in contradistinction to the word "trivial" and where the funding is not trivial to be ignored as pittance, the same would be "substantial" funding because it comes from the public funds. Hence, whatever benefit flows to the societies in the form of share capital contribution or subsidy, or any other aid including provisions for writing off bad debts, as also exemptions granted to it from different fiscal provisions for fee, duty, tax etc. amount to substantial finance by funds provided by the appropriate Government, for the purpose of Section 2(h) of the RTI Act.

28.Now, it needs to be further examined as to whether the provisions of the KCS Act and the KCS Rules are relevant to decide whether the definition clause in Section 2 (h) of the

RTI Act apply to co-operative societies. Sections 43 to 52 in Chapter VI of the KCS Act, which, by virtue of Section 54 of that Act, over-rides other laws, provide direct partnership of Government in societies; indirect partnership of Government in societies; constitution of principal and subsidiary state partnership funds; provision for agreement between

Government and Apex Societies to regulate indirect partnership of Government in societies, etc. They, in particular, the provisions in Section 53 regarding loans and advances by governmental societies; guarantees of various nature etc. would necessarily show the inflow of the funds of the appropriate Government, which go into the financing of the societies. Notifications are issued under Section 40 granting exemptions to the societies from payment of stamp chargeable under the Kerala Stamp Act and also from certain taxes. The societies are granted exemption from the provisions of the Employees Provident Fund & Miscellaneous Provisions Act, 1952. More importantly, as already noticed, it needs to be borne in mind that what is required is "substantially financed directly or indirectly by funds provided by appropriate Government". That does not require the funds of the Government, meaning thereby, money over which the State Government may have title in the legal sense. It is sufficient that the Government is a machinery, the intervention of which, is also necessary, for such funds being provided to, and thereby reaching a society for its activities. The Government have the statutory obligation under Section 80 (1) of the KCS Act to classify societies in the State according to their type and financial position. This has been done as per the provisions of the KCS Rules. Rule 15 provides for classification according to types and for the purpose of Section 80 (1), societies are classified in terms of the provision of Rule 182 of the KCS Rules as shown in Appendix III to those Rules. The pay scales of the staff, except those which are prescribed in that Appendix, will be fixed by the Government from time to time. Section 31 of the KCS Act provides that where the Government have subscribed to the share capital of an apex or a central society or have assisted indirectly in the formation or augmentation of the share capital of an apex or a central society or have guaranteed the repayment of principal and payment of interest on debentures issued by an apex or a central society or have guaranteed the repayment of principal and payment of interest on loans and advances to an apex or a central society, the Government shall have the right to nominate not more than 3 persons or 1/3rd of the total number of members of the committee of such society, whichever is less, to be members of that society. A reading of that provision would essentially show that provisions are made by the Government for the said societies' finances. In so far as the different societies falling into different types under Rule 15 are concerned, the participation of government by providing financial assistance is easily discernible because, in all cases where there is funding of any nature, which require the concurrence or approval of the Government or Government department or if the funding by other agencies are extended with the involvement of the Government or Government departments in identifying the societies which are entitled to such financial assistance, it has to be treated that those societies are non-governmental organisations substantially financed, directly or indirectly by funds provided by the appropriate Government. This view will only give effect to, and further the intention of the legislature and the objects sought to be achieved by having the RTI Act in place.

29. The uncontroverted contention in the counter affidavit is that the Government of Kerala have notified a scheme called Deposit Guarantee Scheme and constituted a corpus fund in terms of Section 57B of the KCS Act and that the Government have contributed amounts to this fund through budget provision. It is also the averment that NABARD provides refinancing facilities to Co-operative Agricultural Credit structure in Kerala at concessional rate. During the financial year 2006-07 NABARD sanctioned 342.65 crores and Banks have withdrawn an amount of Rs.264.19 crores. During the financial year 2007-08 NABARD sanctioned 500 crores and the banks have withdrawn an amount of 405.60 crores. Even in relation to Primary Agricultural Credit Societies which do not receive assistance from NRC(LTO) funds of NABARD, the Government have approved a scheme and framed rules and provisions are made for payment of share capital contribution to Primary Agricultural Credit Societies and Farmers Service Co-operative Banks. These are among the decisions taken and applied by the Government to extend financial aid to the cooperative societies. All financial assistance and subsidies to Co-operative Societies are disbursed to co-operative institutions through Government Orders. As per Agricultural Debt Relief Act, 2001, interest on agricultural loans issued to farmers were written off. These amounts were disbursed to the co-operative banks through Government orders. Exts.R1 (a) to R1(c) disclose the total amounts written off by the Government for years 2004 to 2006, which figures reflect the enormous facility extended under the Agricultural Debt Relief Act, 2001. The Agricultural Debt Waiver Scheme is also applicable to the loans taken from co-operative institutions. The Government gives agricultural production cost incentive

to farmers through co-operatives. Five percentage of principal amount of loans up to Rs.25,000/- will be given to farmers as agricultural production cost incentive. During financial year 2006-07 and 2007-08, 7 crores in each year were disbursed as agricultural production cost incentive. With these uncontrovered facts, it is beyond doubt that the societies are substantially financed by funds provided by the Government.

30. A survey of the different Government Orders, Policy Documents etc. would show that apart from the share capital contribution to the District Co-operative Banks, to the Primary

Agricultural Credit Co-operatives, to the Kerala State Cooperative Bank and capital involvement in Urban Co-operative Banks etc., there is contribution by way of subsidies in

different sectors. Different other types of funding like outright grant and selected funding are also made available to different sectors. None of the writ petitioners has a case that

it does not enjoy any of these facilities. The petitioners cannot sustain a case that they are not substantially financed by the Government. Predominantly, the presumption has necessarily to be in favour of holding that all the societies are substantially financed by funds provided by the State Government. Such finance may trickle by any mode without even any contribution by the Government, from out of its own funds, over which it has title. The Government is the machinery through which the finance reaches the societies, either by way of credits, subsidies, exemptions, other privileges including writing off of

bad debts, which would otherwise have to be paid back into public funds. Having regard to the object sought to be achieved by the RTI Act, it is impermissible to presume to the contrary, particularly when transparency is a matter to be ensured even in the co-operative sector. It needs to be remembered that the promotion of societies by the State, including by its legislative support, is with a view to provide for the orderly development of the co-operative sector by organising the co-operative societies as self governing democratic institutions to achieve the objects of equality, social justice and economic development, as envisaged in the Directive Principles of State Policy of the Constitution of India. The RTI Act has become operational propounding the need of a democracy to have an informed citizenry. Containing corruption is absolutely essential for a vibrant democracy. Transparency and accountability in societies have necessarily to be provided for. The legislative provision in hand, therefore, requires a purposive construction in the above

manner.

31.For the aforesaid reasons, it is held that co-operative societies registered under the KCS Act are public authorities for the purpose of the RTI Act and are bound to act in conformity with the obligations in Chapter II of that Act. Other incidental issues.

32.The question for decision in every other individual case of a society, in the event of any dispute, would be as to whether it is substantially financed by the State Government, in the light of what is stated above. That may have to be determined with reference to the financing of each society. That question would arise for decision only when any co-operative society refuses to act as a public authority. In such event, any citizen whose right to information is legislatively conferred as per Section 3 of RTI Act would be entitled to trigger the duty of the State Information Commission in terms of clauses (b), (e) and (f) of Section 18 (1) of the RTI Act. In that context, the State Information Commission has every jurisdiction to adjudicate and decide on the question as to whether a particular co-operative society, against which a complaint is made under Section 18 (1), is a public authority for the purpose of Section 2 (h). The mere fact that the RTI Act does not expressly prescribe any limits as to finance, to determine the scope of the word "substantially" in Section 2 (h) does not give rise to any presumption of possible abuse of power. This is because, the State Information Commission, as already found, is the authority which can determine that issue on case to case basis. That power is with that high office, the quality of which is statutorily regulated. Declaration of law as made in this judgment would stand to aid as precedent, by law. Advertence to Sections 12, 15, 16 etc. would show that the
legislature has reposed the powers in such a manner that there could be really no room for any presumptive argument as to possible arbitrariness and apprehension of incompetence.

Even with reference to the KCS Act, lots of yardsticks would be available. There is no ground for any such apprehension being recognised with any element of legitimacy.

33.In so far as the contention that information is sought for by different individuals for no rhyme or reason is concerned, the answer is short but clear, and is found in Section 6 (2), which provides that an applicant making request for information shall not be required to give any reason for requesting the information or any other personal details except those that may be necessary for contacting him.

34. Having found that co-operative societies are public authorities for the purpose of the RTI Act, another issue surface for consideration. In some of the cases in hand, applications for information were submitted to the statutory authorities under the KCS Act and KCS Rules requiring them to summon information from the societies. Instead of summoning information by exercising the authority under the KCS Act and KCS Rules, those officers have forwarded those requests to the societies requiring the societies to answer to queries. The definition of information in the RTI Act includes information as are accessible through such statutory authorities. All such information as are accessible through the mechanism of the KCS Act and KCS Rules thus becomes information for the purpose of the RTI Act. Therefore, the provisions under the RTI Act themselves would be sufficient for reaching at such information. Hence, the question whether the authorities under the KCS Act and KCS Rules should have summoned the documents without requiring the societies to communicate the information, is too technical and should necessarily give way to the primary object of the RTI Act, viz., to provide access to information. Therefore, there is no illegality in any officer vested with powers under the KCS Act and KCS Rules forwarding the request obtained by them to the concerned societies with a request or direction to that society to provide information directly to the person who has sought for the information.

For the aforesaid reasons, these writ petitions fail. They are accordingly dismissed. No costs.

Sd/-

THOTTATHIL B.RADHAKRISHNAN,

Judge.

kkb.
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BIMAL KUMAR KHEMANI,
TRAP group of RTI activists
ALIGARH (U.P.)
Mob:09359724625
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Officially Certified A Grade by DoPT
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